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Healthcare Employment and Compensation Trends: The Nursing Shortage and Physician On-Call Pay

March 31, 2011

A few interesting points from Becker’s Hospital Review article: 10 Current Healthcare Employment and Compensation Trends:

Nursing enrollment is rising. Enrollment in nursing programs from baccalaureate level to advance practice is growing...according to a survey by the American Association of Colleges of Nursing.

Nurse provider shortage decreases. A recent report by the Washington Post suggests that the recession alleviated a nursing provider shortage, at least for hospitals in the Washington, D.C., metro area. The recession seems to have pushed a significant number of retired nurses back into the field as well as delayed the retirement dates of older nurses. Additionally, part-time nurses are seeking full-time positions.

These findings are consistent with what we are seeing.  The perceived nursing shortage is really a regional issue.  In some areas, it is still challenging to fill nursing positions, especially in certain specialties.  In other areas, the recession and staffing reductions have created a pool of candidates to choose from.  Regardless, an aging population and expanding health insurance coverage make it likely that in coming years enrolment will struggle to keep up with demand.  Accordingly, it’s more important than ever to have innovative long term recruiting and retention strategies in place.  Of course, selection plays a big role.  When the applicant pool is small, it’s important to make the right hiring decision the first time.  Retention, to a large degree, is driven by cultural 'fit' factors that don’t show up on a resume.

[Physician] on-call pay has increased in half of hospitals. Over half of respondents reported that their on-call pay expenditures increased over the last year, according to Sullivan, Cotter and Associates' 2010 Physician On-call Pay Survey Report.  The survey looked at data from 148 healthcare organizations nationwide.  From 2007-2010, the median on-call expenditures reported by trauma centers more than doubled, from $1.2 million in 2007 to $2.4 million in 2010.  For non-trauma centers, expenditures in 2007 were $433,849, compared to $798,000 in 2010.  The majority of survey participants reported providing on-call pay to at least some of their non-employed physicians with admitting privileges.  Nearly 65 percent reported providing on-call pay to at least some of their employed physicians, and 27 percent indicated that on-call pay was factored into employed physicians' salaries (with no additional pay provided).

As our colleague Sam Agnew, M.D. of Orthopaedic Trauma Practice Consultants often reminds us, battles over on-call pay are not usually the problem itself, but a symptom of a larger problem – a strained hospital-physician relationship.  With a shortage of specialty physicians, and the need for on-call coverage, pay for call is often the only viable solution.  But there are other options to explore.  Given the larger financial challenges faced by hospitals, a solution that involves spending $1 Million can be a problem.  Can the call coverage issue be addressed within the context of a broader, mutually beneficial, approach?  We encourage hospitals to take advantage of discussions about on-call pay as an opportunity to discuss other alignment strategies that might meet the larger goals of both the physicians and the hospital.

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Bryan Warren Bryan Warren was the former Director of Healthcare Solutions at PSI. He was responsible for developing and promoting tools and services designed specifically for the unique challenges faced by healthcare organizations.